No plan B

7th December 2018

This week has again proved that traditional economic reports are taking a back seat to geopolitical developments: to start with, Brexit remains in the center of the attention, especially as rumours grow that Prime Minister May could be delaying the vote in parliament, to seek a compromise with opposition but also potentially to ask the European Union for help at next week’s summit in Brussels. Although EU officials reiterated that there isn’t a Plan B, the EU’s chief Brexit negotiator, Michel Barnier, indicated yesterday that “We will do everything not to have to use this backstop”, referring to the fall back plan on the Irish border. The pound weakened on the news, to a low of 1.1180 against the euro.
On the market, the FTSE 100 index suffered its biggest percentage fall since the day after the EU referendum in June 2016 – closing almost 218 points lower at 6,704. These losses were prompted by growing fears of escalating US-China trade war. Today’s Non-Farm Payroll report, usually the main US economic release of every month has been partially overshadowed by the same worries. After a strong report in November, investors believe that the American economy is still hot but the December jobs report (Non-Farm payrolls) should provide some answers and possibly boost the US Dollar, just before the last Federal Reserve meeting of the year. Traders will also scrutinise new earnings figures for clues as to whether the Fed will keep raising interest rates in 2019.

What it means for you

Get in touch to know more about the latest news & how it could impact your transfers
Contact us +44 (0)203 582 3957, info@audensa.com